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Developed Market Stocks & Bonds Have Never (Ever) Been This Expensive
Thanks to the new normal world of extremely loose monetary policy and extraordinary accumulations of financial assets by Central Banks, Deutsche Bank finds that we live in a period not of selectively expensive global asset prices, but of record "expensiveness" across developed market bonds, stocks, and real estate.
In aggregate, across the three main asset classes, average valuations are close to the highest they’ve ever been relative to their long-term trend. The current reading of just under 80% is similar to that seen at the turn of the twentieth century and during the 1940s when financial markets were artificially repressed around war time.
And, based on Deutsche's valuation metrics, bonds and equities alone are at their highest ever combined valuations when aggregated across these 15 countries.
In addition, 83% of observations are in their top 20% of valuations through history.
Peak Asset Prices?
Source: Deutsche Bank
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The Fed had nothing to do with this.
Of course not. It was the fairies spreading fairy dust all over Wall St. And yet all the smart people see no problem.......
LOL! this can't be, this would indicate massive inflation...
Tiny penis enhancement and Jamie Dimon needs a lot of it......
But Ron Insana says the market is oversold and the correction is over. Time to buy 'virtual' stocks.
http://www.zerohedge.com/news/2015-08-24/ron-insana-i-only-manage-virtua...
it isn't expensive if you do it with printed money....
This can only mean one thing... sell gold, buy stawks.
... and there we go...
This would be worrying if I believed in Peak Central Banking.
And P/E ratios are artificially lowered due to DEBT-based stock buybacks where the majority of money is being spent instead of in productive investments. Just more monetary manipulation giving false signals.
"The buyback also helps to improve the company's price-earnings ratio (P/E). The P/E ratio is one of the most well-known and often-used measures of value. At the risk of oversimplification, when it comes to the P/E ratio, the market often thinks lower is better. Therefore, if we assume that the shares remain at $15, the P/E ratio before the buyback is 75 ($15/20 cents); after the buyback, the P/E decreases to 68 ($15/22 cents) due to the reduction in outstanding shares. In other words, fewer shares + same earnings = higher EPS! Based on the P/E ratio as a measure of value, the company is now less expensive than it was prior to the repurchase despite the fact there was no change in earnings."